AUB Group has completed a $150 million share placement to help fund future growth plans as it continues with full ownership of the Tysers retail business following the collapse of a plan to partly divest the operations through a joint venture. 
 
The share placement completed on Friday replaces an expected $100 million that would have been received from PSC Insurance Group through the joint venture transaction. 
 
AUB’s $880 million purchase of Lloyd’s wholesale broker Tysers was announced last May, marking its first major acquisition outside Australia and New Zealand. The deal included a plan to spin off the Tysers retail business into a venture with PSC, but the companies said last week that the plan wouldn’t go ahead. 
 
The equity placement was strongly supported by domestic and offshore institutional investors with demand exceeding availability, AUB says. The placement was completed after the company also last week upgraded its full-year underlying net profit guidance to $120-124 million. 
 
“We are very pleased with the equity raising outcome and believe it is a testament to the strong performance of both AUB and the Tysers business,” AUB Group CEO Mike Emmett said. 
 
“We continue to focus on delivering our strategy by combining strong organic performance with executing accretive M&A. This raising provides us the financial flexibility required to capitalise on our attractive M&A pipeline, so we thank our investors for their continued support.” 
 
Mr Emmett says bolt-on UK broking acquisitions and underwriting agencies could be added to its growth agenda, expanding the reach of the Tysers operations. 
 
The existing mergers and acquisition focus in Australia and New Zealand centres on underwriting agencies, specialty broking in Australia and building the size of the New Zealand business. 
 
Mr Emmett told an investor briefing that the Tysers joint venture had foundered as PSC wished to own all of the UK retail business.  
  
“Fundamentally, they wanted to be 100% owners of the business and we didn’t want to fully exit the business,” he said. “There were other items still being discussed and points of difference, however that was the fundamental one.”  
  
Mr Emmett said Tysers retail is a high-performance business which continues to demonstrate attractive profitability and is strategically aligned with AUB’s broking expertise. 
 
PSC had previously advised that the expected joint venture starting date had slipped, and on April 28 said deal finalisation had been delayed as the companies continued “to discuss a number of commercial items, including the intended term of the joint venture and the terms and rights between [PSC] and AUB companies on conclusion of the joint venture”. 
  
The company last week said that further to its April notice, it had formally ended discussions regarding the memorandum of understanding for the proposed venture. It will now proceed with its own plans. 
  
“The group has a solid pipeline of acquisitions and our balance sheet is in a strong position to  
continue to grow this with our selective and disciplined M&A strategy,” PSC said.  
 
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